American Bancorp of New Jersey Inc. (American Bancorp), incorporated in May 2005, is a New Jersey corporation that was incorporated for the purpose of being a holding company for the Bank, a federally chartered stock savings bank. The Company is a unitary savings and loan holding company and conducts no significant business or operations of its own. The Company's core business is using retail deposits in order to fund a variety of mortgage and consumer loan products. The Company operates as a traditional community bank, offering retail banking services, one- to four-family residential mortgage loans, home equity loans and lines of credit, multi-family and non-residential mortgage loans, business and consumer loans. It also invests in mortgage-backed securities, collateralized mortgage-backed obligations and other investment securities. The principal source of funds for the Company's lending and investing activities is retail deposits, supplemented with Federal Home Loan Bank borrowings. The Company's interest-earning assets consist primarily of residential mortgage loans, multi-family and commercial real estate mortgage loans, residential mortgage-related securities and United States Agency debentures. Interest-bearing liabilities consist primarily of retail deposits and borrowings from the Federal Home Loan Bank of New York. Lending Activities The Bank focuses on the origination of one- to four-family loans, which comprise a significant majority of its total loan portfolio. The Company's also provide financing on multi-family dwellings, mixed-use properties and other commercial real estate. Commercial business loans, construction loans, home equity loans and consumer loans make up the rest of the total loan portfolio. American Bancorp's primary lending activity consists of the origination of one- to four-family mortgage loans, most of which are secured by property located in northern New Jersey. The Company generally originates a one- to four-family mortgage loan in an amount up to 80% of the lesser of the appraised value or the purchase price of a mortgaged property. The Bank's residential loans are generally originated with fixed or adjustable rates and have terms of 10 to 30 years. It also offer mortgage loans with bi-weekly payments and recently began offering mortgage loans with terms up to 40 years, as well as fully amortizing, adjustable rate loans with interest only payments for the first three to five years. The Bank also offers an adjustable rate loan with a rate that adjusts every three years to the three-year Constant Maturity United States Treasury index. The fixed rate mortgage loans that the Bank originates generally meet the secondary mortgage market standards of the Federal National Mortgage Association. For the purposes of interest rate risk management, sell qualifying one- to four-family residential mortgages in the secondary market to the Federal National Mortgage Association and other investors without recourse and with servicing retained, and it has entered into a master selling and servicing agreement with the Federal National Mortgage Association under which the Bank sold $2.4 million, during the fiscal year ended September 30, 2005 (fiscal 2005). The Bank also originate loans on multi-family and commercial real estate properties, including loans on apartment buildings, retail/service properties, and other income-producing properties, such as mixed-use properties combining residential and commercial space. American Bancorp's construction lending includes loans to individuals for construction of a primary residence as well as loans to builders and developers for single family, multi-unit and multi-house projects. Consumer loans consist of savings secured loans and unsecured consumer loans. The Company will generally lend up to 90% of the account balance on a savings secured loan. At September 30, 2005, the Company had $72,000 of unsecured consumer loans. American Bancorp's home equity loan portfolio includes home equity lines of credit and second mortgage term loans. Home equ

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